Bill seeks emergency funds for hospitals

The state’s public hospital network says it is in need of emergency funding if it is to maintain its current level of service as Hawaii’s health care safety net.

Specifically, administrators of Hawaii Health Systems Corp.’s East Hawaii Region — encompassing four acute and long-term care facilities and 11 clinics on the windward side of the Big Isle — say they expect to come up short this year to the tune of just less than $5 million unless aided by the state.

Senate Bill 2866, which is expected to be taken up in conference committee sometime next week, requests a total of $18.2 million in emergency appropriations from the state Legislature for facilities across Hawaii.

In a Tuesday phone interview, Hawaii Health Systems Corp. Acting President and CEO Alice M. Hall explained a large part of the HHSC regions’ shortfalls will be as a result of the most recent collective bargaining decision approving raises for hospital workers.

“Unfunded raises totaled $11.2 million this year,” she said.

Meanwhile, declining Medicare reimbursements and the federal sequestration cuts that went into effect this fiscal year have also taken their toll.

“Physicians and hospitals are being paid less money as a result of Obamacare, so we’ve had reimbursement reductions and the federal sequestration to deal with, totaling $4.6 million for FY (fiscal year) 2014,” Hall said.

HHSC’s Kauai region was hit especially hard by operational deficiencies, she said, with lower revenues and fewer beds being filled than anticipated.

“They’ll be impacted in a severe way (if the emergency funding is not approved),” she said.

The Oahu and Kauai regions will have trouble making payroll if the state does not help meet revenue deficiencies.

East Hawaii might not be in quite that dire of a situation, but operations here are still in a tough predicament compared to other hospitals around the country.

“HMC (Hilo Medical Center) is at 100 days of accounts payable right now,” Hall said. “That’s 3.5 months it takes for a vendor to get paid, on average, and we can only stretch that so far. They can’t float us forever. So, we start paying interest, and that makes care more expensive, then they start putting credit holds on us.”

Nationally, the average hospital has about six months of cash on hand, she said. At most recent count, HMC had 24 days.

East Hawaii facilities saw a 2 percent decrease in Medicare reimbursements this year, totaling approximately $1.7 million, according to Gary Yoshiyama, chairman of HHSC’s East Hawaii Regional Board. Meanwhile, HMC’s emergency room has seen a 4 percent increase in patient volume, a 2 percent increase in acute inpatient visits and a 5 percent increase in outpatient volumes.

“Medicare and Medicaid reimbursement reductions have significantly impacted our region as Medicare and Medicaid patients make up approximately 76 percent of our patients,” Yoshiyama reported in March testimony to legislators.

On top of that, funding for collective bargaining adjustments in fiscal years 2013 and 2014, combined with funding to pay down accounts payable debts, total $3 million.

“In response, internally we continue to review and reduce operational expenditures, delay major initiatives where possible and delay payments to vendors,” Yoshiyama said. “Patient service volumes are up, reimbursements are down, expense cutting measures are implemented, expenses continue to raise, and payables are delayed. The emergency appropriation is a short term measure to continue provision of accessible quality health care within our regions.”

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